NHL lockout just the tip of the iceberg for CBC

Oct 9, 2012

Hamilton (October 9, 2012) - The CBC will suffer a
devastating financial loss of as much as $200 million annually if it loses the
rights to Hockey Night in Canada in
2014 when its agreement with the NHL expires, according to a submission to the
CRTC by the broadcast watchdog Friends of Canadian Broadcasting.

"The CBC is hooked on hockey and the lockout could be just a
bitter foretaste of the future for the CBC," says Ian Morrison, spokesperson
for the broadcast watchdog Friends of Canadian Broadcasting.

According to FRIENDS' analysis, Hockey Night in Canada:

Delivers more than 50%
of the ad revenue earned by CBC's English TV Network. And because hockey sales
are linked to sales elsewhere on the schedule, hockey drives additional ad
sales (as much as $10 million) earned by local stations.

Punches well above its weight, occupying 10% of
the schedule but delivering 30% of the entire audience watching CBC English
TV. Losing hockey would wipe out
one third of CBC's audience.

Earns a profit for the CBC, albeit a much
smaller one in recent years because of a 50% increase in fees the CBC agreed to
pay the NHL when it last negotiated a rights deal in 2007.

After expenses of approximately $115 million,
hockey clears $15 million for the CBC.

Even
if the CBC were to avoid the high cost to buy, market and produce hockey it
would still face the expense of replacing the 400 hours hockey occupies on its schedule
and this is the issue that would play havoc with CBC's finances. FRIENDS' analysis estimates this would
cost approximately $500,000 per hour for a total cost of $200 million and would
earn the CBC substantially less ad revenue.

"All told, the loss of hockey would be
much worse than the most recent round of cuts from the federal budget. It would be a game changer for our
national public broadcaster," Morrison said

The CBC is facing deep-pocketed competitors for its hockey
rights who are thirsty for hockey.
Bell and Rogers both own specialty channels dedicated to sports. Together,
they control Maple Leafs Sports and Entertainment, the parent company of the
Toronto Maple Leafs, and they have a recent history of beating the CBC for
other broadcasting rights for major sports events like the Grey Cup and the
Brier Curling Championship, and until recently, the Olympic games.

"If the CBC
were to lose hockey, it would need to replace some 400 hours of hockey
programming with a similar quantity of the very best, most attractive - and
expensive ­ Canadian shows. Any other replacement strategy designed to minimize
costs, such as American movies or repeats of Canadian shows, would prevent the
CBC from meeting its Canadian content requirements and lower audiences,"
Morrison said.

FRIENDS has filed its analysis with the CRTC which on
November 19 will begin the first review of the CBC's broadcast licences since
1999. The broadcast watchdog is calling on the CRTC to require the CBC to
explain how it would deliver the Canadian content, regional shows and
distinctive programs that the Broadcasting Act requires in the event of the CBC
losing HNIC.

"FRIENDS is not proposing that CBC Television drop hockey
but our national public broadcaster must prepare for this scenario, which could
open new and exciting possibilities to operate more like a public broadcaster in
sharp distinction from its private sector competitors - just as its radio
services have done for many decades," Morrison said.

FRIENDS is hosting a town hall meeting in Hamilton this
evening called The CBC We Want,
moderated by Veronica Tennant, producer, director and prima ballerina. The event takes place from 5pm to 7pm
at the Atrium, McMaster Innovation Park, 175 Longwood Road South. It is one of a national series to give
viewers and listeners an opportunity to speak out about what they expect from
the CBC, and is co-sponsored by McMaster's Department of Communications Studies
and Multimedia and the McMaster-Syracuse Master of Communications Management
program.

Friends of Canadian Broadcasting is an independent watchdog
for Canadian programming and is not affiliated with any broadcaster or
political party.